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Yes, it has to be regulation.

April 8, 2010

As it turns out, yesterday’s post about regulation has better versions everywhere.  Oh well.

But there is one element I haven’t seen elsewhere yet: why regulation is particularly important for industries like coal.

With other industries, we’ve got a major leverage point in addition to regulation: consumer pressure.

When Gap got in trouble for using (or allowing its subcontractors to use) sweatshop labor, they faced a consumer protest campaign.  Half of the news stories about Toyota’s recent woes centered on consumer response.

To make an Upper Big Branch metaphor, think of it this way: A local  restaurant is repeatedly fined for not having any smoke alarms or fire extinguishers, but the owner drags his/her feet because installing smoke alarms would require some electrical re-wiring.  A fire breaks out in the kitchen of one restaurant, spreads quickly, and kills 25 employees.

You would never go to that restaurant again.

The problem with coal companies–and other natural resource extraction companies–is that the link between the producer and the consumer is murky and convoluted.  Consumer won’t stop using Massey Energy coal to punish the company for their lax safety standards because consumers have no idea whether or not they’re using Massey Energy coal.

In the absence of pressure from the consumer, effective regulation becomes that much more important.

There are attempts–like the Dogwood Alliance’s Green Grades–to link natural resources to the retailers that buy them and then put consumer pressure on those retailers.  Undoubtedly, they offer an interesting alternative for the future.

But given how much trouble a university that wanted to stop buying mountain top removal coal had in pin-pointing the exact source of it’s coal, I’d say we’re a long way away from having anything but regulation for coal.

Jonas

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